December 12, 2025

In December 2025, multiple major outlets reported that President Donald Trump is expected to push for marijuana to be reclassified federally from a Schedule I drug to a Schedule III drug under the Controlled Substances Act (CSA). This shift, if it happens, would be the most significant federal cannabis policy move in decades. 

This blog breaks down:

  • What has happened so far

  • What Schedule III means

  • The potential effects for New York’s legal cannabis market

  • What it won’t do

What’s Happened So Far

Recent reporting indicates that President Trump is preparing to direct his administration, potentially through an executive order, to move cannabis from Schedule I to Schedule III. This decision has been discussed in meetings with industry leaders and members of his administration.

This move follows months of commentary since earlier in 2025, when Trump and federal officials said they were considering reclassification, continuing momentum from the previous administration’s attempts to ease restrictions too. However, and this is important; no final decision has been announced yet. White House officials have cautioned that the plan hasn’t been finalized, and changes could still happen. 

What Does “Schedule III” Actually Mean?

Under the federal Controlled Substances Act, drugs are placed in “schedules” based on their:

  • Potential for abuse

  • Accepted medical use

  • Safety under medical supervision

Currently, cannabis is a Schedule I drug, the most restrictive category, alongside substances like heroin and LSD. This classification means it is federally considered to have no accepted medical use and a high potential for abuse, even though many states have fully legal adult-use and medical frameworks.

Schedule III is a much less restrictive category, used for substances with a moderate to low potential for physical and psychological dependence, and recognized medical use (e.g., certain painkillers, ketamine, anabolic steroids). 

Rescheduling cannabis to Schedule III would create a new federal status that may:

  • Acknowledge accepted medical use

  • Reduce regulatory burdens on research

  • Allow state-licensed businesses to deduct ordinary expenses on federal taxes (ending most applications of IRC §280E)

  • Encourage some banks and lenders to work more easily with the industry

Analysts believe investors and cannabis stocks responded strongly to this news, with several major companies seeing double-digit gains on reports of the potential shift.

What Schedule III Doesn’t Do

It’s important to understand what reclassification won’t automatically accomplish:

  • It does not fully legalize cannabis at the federal level. Recreational use would remain illegal federally unless Congress later passes separate legislation.

  • Individual possession, distribution, and sale of cannabis could still be federal offenses unless other laws change.

  • It won’t automatically override state cannabis laws which is both good and expected, since states like New York already regulate cannabis independently.

  • True medical pathways, such as an FDA-approved prescription model, would still require additional regulatory action and clinical evidence. 

In other words, rescheduling is a policy shift, not full legalization.

What This Could Mean for New York

1. Stronger Federal Support for State Markets

New York’s adult-use and medical cannabis programs operate under state law, but federal Schedule I status still complicates banking, research, tax treatment, and interstate commerce. A Schedule III designation could:

  • Reduce tax burdens on licensed operators by mitigating the effects of IRS §280E

  • Make some federal financial services more accessible to cannabis businesses

  • Encourage more institutional investment in NY cannabis companies

Even though New York’s state market is robust on its own, easing federal restrictions would strengthen it and attract broader capital and service support.

2. Better Research Opportunities

Because federal research on Schedule I substances has been tightly restricted for decades, moving cannabis to Schedule III could help academic and clinical research flourish in NY, potentially leading to new medical insights, dosing strategies, and therapeutic applications.

3. Banking & Financial Services

Cannabis businesses often struggle to access traditional banking because cannabis remains illegal at the federal level. While Schedule III doesn’t magically legalize cannabis, it reduces the risk profile for some federal regulators and lenders, possibly making financial services more accessible, even in states like New York.

4. Continued State Authority

Importantly, New York would retain its authority to regulate cannabis. A federal shift does not replace state frameworks, it simply reduces barriers. New York’s rigorous packaging, testing, equity, taxation, and product safety standards remain intact.

Why This Matters Now

Reports suggest that a formal announcement could come soon, potentially within weeks, but nothing is final yet.

For industry participants, including growers, retailers, processors, and consumers, this could be the most consequential federal cannabis policy change in decades, even if it’s not full legalization. For shops in New York like Cannabis Corner, it’s a signal that federal attitudes toward cannabis are shifting in a way more aligned with state markets.

Bottom Line

Trump’s potential rescheduling push from Schedule I to Schedule III is real but still unfolding. If it happens, it won’t legalize cannabis overnight, but it could reduce regulatory burden, boost investment, open research doors, and help state-licensed markets operate with greater federal tolerance.

This shift would strengthen New York’s already thriving legal cannabis ecosystem and help bridge the gap between federal policy and state regulation, a longtime goal of advocates, businesses, and consumers alike.